Apartment rents in capital up 5.6pc to three-year high
PRIVATE tenants have seen rents fall around the country – except in Dublin where demand for apartments has seen them jump by more than 5pc.
It now costs an average of €1,022 a month for an apartment in the capital, the highest level for more than three years.
The latest rent index from the Private Residential Tenancies Board (PRTB), the only one of its kind that tracks rents paid as opposed to rents sought, shows a marked divergence between the capital and the rest of the country.
While rents in Dublin grew by 3.5pc between the first and second quarters of the year, and by 4.7pc since 2012, rents elsewhere are down 1.3pc over the past 12 months.
Strong demand for apartments in the capital has pushed up prices by 5.6pc in the past year to an average €1,022 a month, up from €969 and the highest level since the start of 2009.
With a shortage of family homes on the market, rents for houses have increased by 3.6pc since last year and now cost an average of €1,135 a month.
Outside of the capital, rents for houses fell by 3.2pc on an annual basis.
It now costs an average of €612 a month to rent a house outside of Dublin, while an apartment is €652.
The index is compiled by the Economic and Social Research Institute (ESRI) on behalf of the PRTB and is based on the board's register of more than 237,000 tenancies throughout the State.
PRTB director Anne Marie Caulfield said the rise in rents for Dublin apartments probably reflects the end of the bedsits market, with some landlords who had offered that type of accommodation pulling out.
Homeless charity Focus Ireland said the rise in rents is bringing the risk of homelessness "a little bit closer for thousands of people".
Meanwhile, Dr John McCartney, the director of research at estate agency Savills, said that while the rise in Dublin rents adds further pressure on tenants, it is good news for homeowners.
He said properties now appear to be significantly undervalued, and predicted their value may rise by up to 26pc.
He said yields – the market price of an asset versus its income-generating potential – have to fall in Dublin and, with rents rising, the only way this can happen is for prices to grow.
"Therefore, we expect recent price increases in the capital to continue, whereas there is unlikely to be significant growth in provincial markets," he added.
Joe O'Connor, the president of the Union of Students in Ireland, said students are becoming increasingly desperate to find accommodation, particularly in Dublin and Maynooth.
"We have seen digs costing between €150 and €170 per week, which is quite exorbitant," he said.
"I know some students have been searching for accommodation for quite some time. They are barely able to secure a viewing, let alone a tenancy."
One parent who contacted the Irish Independent told how her daughter has attended a number of "mass-viewings" where as many as 40 students are gathered by agents to view a property.
"It is forcing young people into making very quick decisions," she said.